New Study Examines Product Failure Cues

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New Study Examines Product Failure Cues

12/28/2015

CAMBRIDGE, Mass. — Diet Crystal Pepsi, Frito Lay Lemonade and Watermelon-flavored Oreos are namely a few limited-time products that have filled store shelves in recent years only to have been flops and failures among consumers.

Seeing such products on shelves may leave consumers asking themselves: Who exactly buys these types of products anyway?

A new study classifies these consumers as "harbingers of failure," or shoppers with a natural affinity for products destined to flop — or a product discontinued in less than three years.

The study, published in the Journal of Marketing Research, reveals that these “star-crossed” consumers can easily identify flop-worthy products of all kinds.

"These harbingers of failure have the unusual property that they keep on buying products that are taken from the shelves," said Catherine Tucker, a marketing professor at Massachusetts Institute of Technology (MIT)and one of the study's co-authors. "This is a cross-category effect. If you're the kind of person who bought something that really didn't resonate with the market, say coffee-flavored Coca-Cola, then that also means you're more likely to buy a type of toothpaste or laundry detergent that fails to resonate with the market."

Researchers drew upon two data sets from a large chain of convenience stores spanning across the United States, tracking consumer purchases from January 2003 to October 2009 and November 2003 to November 2005.

In a key part of the study, the researchers studied consumers whose purchases flop at least 50 percent of the time and saw pronounced effects when the harbingers of failure buy products. When the percentage of total sales of a product accounted for by these consumers increases from 25 percent to 50 percent, the probability of success for that product decreases by 31 percent. And when the harbingers buy a product at least three times, the probability of success for that drops 56 percent.

"You could think of it as preference of risk," explained Duncan Simester, a marketing professor at MIT and another co-author of the study. "People who are more willing to take a risk on an unusual product are more willing to take a risk in multiple categories."

OTHER FINDINGS

Although strong initial sales of products normally seem like a good thing, the researchers found that this is not always the case, especially if the harbingers of failure are rushing out to purchase those products.

"It's not just how many people are buying them, it’s how many of the right people are buying them and how many of the wrong people aren’t buying them," Simester said.

Tucker added, "Usually when you're doing market research, the common wisdom is that people liking your product is a good thing. But what we've done in this research is identify a group of people who really want to [have] hate your product. And that changes the paradigm of market research."

The researchers also examined and ruled out other possible explanations of the phenomenon. One is that harbingers are not evidently any more tired or distracted than anyone else when choosing products.

"It's not the case that these people are buying goods at 2 a.m., or something like that," Tucker explained. "They're not inattentive. Systematically, they are able to identify these really terrible products that fail to resonate with the mainstream."

Researchers of the study said they are continuing to pursue related research and are interested in looking at how widely the "harbingers of failure" pattern holds in a variety of areas, from everyday shopping to financial markets.

"We're certainly thinking about whether this is a much more general result than people simply buying new products," Simester said.